[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Notices]
[Pages 6921-6922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3394]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. SA98-1-000]


Bowers Drilling Company, Inc.; Notice of Petition for Adjustment

February 5, 1998.
    Take notice that on February 4, 1998, Bowers Drilling Company, Inc. 
(Bowers) filed a petition for adjustment under section 502(c) of the 
Natural Gas Policy Act of 1978 (NGPA),\1\ requesting to be relieved of 
its obligation to pay Kansas ad valorem tax refunds, as required by the 
Commission's September 10, 1997 order in Docket Nos. GP97-3-000, GP97-
4-000, GP97-5-000, and RP97-369-000.\2\ Bowers' petition is on file 
with the Commission and open to public inspection.
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    \1\ 15 U.S.C. 3142(c) (1982).

    \2\ See 80 FERC para.61,264 (1997); order denying reh'g issued 
January 28, 1998, 82 FERC para.61,058 (1998).

    The Commission's September 10 order on remand from the D.C. Circuit 
Court of Appeals \3\ directed first sellers under the NGPA to make 
Kansas ad valorem tax refunds, with interest, for the period from 1983 
to 1988. The Commission's September 10 order also provided that first 
sellers could, with the Commission's prior approval, amortize their 
Kansas ad valorem tax refunds over a 5-year period, although interest 
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would continue to accrue on any outstanding balance.

    \3\ Public Service Company of Colorado v. FERC, 91 F.3d 1478 
(D.C. 1996), cert. denied, Nos. 96-954 and 96-1230 (65 U.S.L.W. 3751 
and 3754, May 12, 1997) (Public Service).
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    Bowers asserts that its financial status cannot absorb the $259,703 
charge that it has been assessed, even if the refund were amortized 
over a 5-year period.
    Bowers bases its claim, in part, on an estimate of its net profit 
over the next five years from the wells located on the leases that 
Bowers contends are subject to the Kansas ad valorem tax refunds. Using 
its average 1997 net profit of $14,699 from those 10 wells, Bowers 
projects its average income over the next five years, using a 15 
percent per year decline, to be $46,336 (see below).

1998--first year.......................        $14,699-2,205=    $12,494
1999--second year......................         12,494-1,874=     10,620
2000--third year.......................         10,620-1,593=      9,027
2001--fourth year......................          9,027-1,354=      7,673
2002--fifth year.......................          7,673-1,151=      6,522
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5-year Average Income..................  ....................    $46,336
                                                                        

    From this, Bowers derives an average monthly net income of $3,862 
[$46,336  12 = $3,862]. Bowers then multiplies its projected 
$3,862 in average monthly net income by 60 months to derive a 5-year 
estimated income of $231,720 [$3,862  x  60 = $231,720]. From this 
figure, Bowers subtracts $41,346 that it attributes to the anticipated 
plugging of seven (7) of the 10 wells during the 5-year refund period. 
According to Bowers, this leaves it with an estimated net profit from 
the subject leases (over the next five years) of just $190,374 
[$231,720-$41,346 = $190,374]. From this, Bowers concludes that $69,329 
will remain as an unrecovered balance after the five years have elapsed 
[$259,703-$190,374 = ($69,329)].
    Bowers also bases its request for relief from its Kansas ad valorem 
tax refund obligation on a March 17, 1992 take-or-pay settlement with 
Williams Natural Gas Company (Williams), wherein (according to Bowers) 
it negotiated a mutual release with Williams, from all claims regarding 
its contracts with Williams, for all periods prior to 1992, including 
any Federal Energy Regulatory Commission claims arising out of, or in 
conjunction with, or relating to its contracts with Williams. In view 
of this, Bowers contends that granting the requested adjustment relief 
is warranted because the Kansas ad valorem tax refund is a Federal 
Energy Regulatory Commission claim.
    Any person desiring to be heard or to make any protest with 
reference to said petition should on or before 15 days after the date 
of publication in the

[[Page 6922]]

Federal Register of this notice, file with the Federal Energy 
Regulatory Commission, Washington, D.C. 20426, a motion to intervene or 
a protest in accordance with the requirements of the Commission's Rules 
of Practice and Procedure (18 CFR 384.214, 385.211, 385.1105, and 
385.1106). All protests filed with the Commission will be considered by 
it in determining the appropriate action to be taken but will not serve 
to make the protestants parties to the proceeding. Any person wishing 
to become a party to a proceeding or to participate as a party in any 
hearing therein must file a motion to intervene in accordance with the 
Commission's Rules.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-3394 Filed 2-10-98; 8:45 am]
BILLING CODE 6717-01-M